![](https://findbestfinances.com/wp-content/uploads/2022/05/Finance-of-America-cut-600-jobs-in-Q1-1.png)
![](https://findbestfinances.com/wp-content/uploads/2022/05/Finance-of-America-cut-600-jobs-in-Q1-1.png)
Fast-rising interest rates hit Finance of America Companies hard in the first quarter of 2022 and the company cut almost 600 jobs compared to one year ago.
Like many of its competitors, the lender reported that its traditional mortgage business saw reduced originations and margins from January to March, mainly due to a drop-off in refinance volumes and an increase in spreads on non-agency mortgage products, which resulted in a reduction in revenues.
The lender’s traditional mortgage business reached $5.1 billion in funded volume in the first quarter, down 26% quarter over quarter and 39% year over year. Meanwhile, gain-on-sale margins declined from 3.41% in Q1 2021 to 2.52% in Q4 2021 and then to 2.11% in Q1 2022.
“The devastating war in Ukraine and rapidly rising inflation resulted in the fastest increase in interest rates in decades,” said Patti Cook, FoA’s CEO, to analysts. “We don’t expect interest rates to return to the level we’ve seen earlier in the year.”
The executive said refinance, as a percentage of overall volumes in the company, reached 45% in the first quarter, still not reflecting the roughly 50 basis point increase in rates during March. As a result, the lender expects the percentage to be much lower in the second quarter.
To manage the business during the storm, FoA has reduced its headcount. The company cut 598 jobs onshore and offshore compared to one year ago. According to Cook, the company will keep the headcount aligned with the volume of business.